January home sales increase across Virginia

Home sales continue to grow across the state and Hampton Roads, but it may be too early to call it a return to the 2005 and 2007 seller's market, according to an area economist.

"The market is improving," said Gary Wagner, Strome College of Business professor of economics and associate director of the Economic Forecasting Project at Old Dominion University. "But the market has not changed over into a seller market."

Realtors sold 5,597 homes in January, according to a recent report released by the Virginia Association of Realtors (VAR). That's a 4 percent increase over the 5,377 residential units sold during January 2014.

The increase in home sales represented $1.7 billion in residential real estate sold during January 2015, or an 8 percent increase over $1.5 billion in home sales during January 2014, the report said.

While the report does not reflect all of the state's transactions, it does highlight whether Virginia's housing market is improving or continuing to struggle.

Wagner said despite an increase in January sales, a number of homes in Hampton Roads are being sold at a loss.

Last year, Wagner said the median price for a home in Hampton Roads was $193,200. That's down from $223,000 during the housing boom of 2007, yet up from $180,000 posted in 2011.

"It will never look like it did back in 2005 and 2007," Wagner said. "Increases in the 3 to 5 percent range are not far off in the horizon."

Overall, the median home price across Virginia was $239,900 last month, according to the report. That's nearly a 5 percent increase from $229,000 posted in January 2014, and a nearly 7 percent increase over the $225,000 median price posted in January 2013.

However, the statewide median home price in December 2014 was $260,000. Homes also stayed on the market on average for 91 days, the report said, a 7 percent increase over 82 days in December 2014.

Wagner said the state's job market is still affecting homes sales in all Virginia metropolitan areas, including Hampton Roads.

While the worst of sequestration is behind the region and state, employment growth remains stagnant.

"Between December 2013 and December 2014, Hampton Roads ranked 257 out of 381 metros for job growth," Wagner said. "It's an improvement over the 330s … we posted 0.8 percent job growth."

Harrisonburg and Richmond outperformed top population centers in the state, ranking 125 and 126, respectively, Wagner said. Northern Virginia, long a federal government job behemoth, ranked 300 – posting 0.3 percent in job growth between December 2013 and December 2014.

But despite some headwinds, Virginia residents remain upbeat about the state's housing market.

A recent Roanoke College survey of 605 respondents highlighted that 60 percent of Virginians believe the condition of the real estate market has improved since last year, the survey said. Another 52 percent believe that conditions will improve over the next year.

Renewed optimism in the housing market could be good news for area Realtors as spring approaches, which is typically when home sales increase.

"Going forward, Virginia can expect to see steady increases as the spring selling season begins. Mortgage interest rates and the Virginia unemployment rate continued to decrease in January and December, respectively," said Deborah Baisden, president of the Virginia Association of Realtors, in a statement. "We expect the combination of those two factors to have a strong positive effect on spring sales."